Certified Government Financial Manager (CGFM) Practice Exam 2025 - Free CGFM Practice Questions and Study Guide

The requirement for allowable costs under grants emphasizes that costs must be properly documented and conform to limitations set forth in the grant agreement and applicable regulations. Proper documentation ensures that there is a clear record of expenses incurred, which is vital for accountability and transparency in the use of public funds.

Additionally, grants often have specific limitations regarding what costs can be charged to the grant. These limitations can include restrictions on the types of expenses that are allowable, as well as caps on the amount that can be charged for certain expenditures. Conforming to these requirements ensures compliance with the terms of the grant and helps protect the integrity of the funding process.

The other options do not align with the established guidelines for allowable costs under grants. Matching costs with future funding is not a general requirement for allowable costs; rather, it focuses more on the matching principle in some accounting practices. Allowing costs to exceed initial budgets without justification undermines budgeting discipline, while requiring costs to always be the lowest among competing bids could be overly restrictive and may not consider other factors such as quality and service, which are important in procurement processes.